If it seems as though everywhere you turn today, you are confronted with news about Bitcoin, it is not your imagination. Blockchain technology, the technology behind Bitcoin, has disrupted the currency industry more so than anything else in history has. As crazy as it might sound, numerous industries are now benefitting from this groundbreaking technology. While it might sound somewhat confusing, blockchain technology is simply the process for recording events in a database, referred to as the blockchain. After data are added to the database, that data cannot be removed from the blockchain or even altered. Therefore, blockchain acts as a type of historical record that can be verified. While the technology behind the blockchain is relatively simple, it has completely disrupted many industries.
In fact, blockchain technology is changing the real estate industry in three distinct ways.
1. Helping Manage Records
Since blockchain technology can be used for maintaining records, it can also be used to maintain records of ownership. In fact, both businesses as well as governments are now using blockchain technology for managing data and maintaining records. There are predictions that blockchain technology could dramatically change how real estate records are managed. Some countries, such as Honduras, have already made a commitment to replacing their current real estate records with blockchain technology. With this type of transition in place, citizens could one day take advantage of the opportunity to buy or a sell a home using an app on their smartphone.
2. Providing Enhanced Security for Records of Ownership
In the last few years, there have been increased concerns regarding security, particularly in light of numerous well-publicized cyberattacks. Real estate records are necessary for property security. At the same time, various records are necessary for securing both credit and identities. Unfortunately, all such records can be maliciously hacked or altered. The good news is that blockchain technology makes it possible to secure information via a distributed processing network that is much more difficult to hack than a centralized location.
3. Increasing the Speed of Transactions
In the past, it could frequently take days for payments to clear a bank. By relying on the much more highly secure database behind blockchain technology, it could become possible to reduce the time it takes for a payment to clear a bank from days to just a few minutes. As a result, it becomes possible to remove at least one of the most burdensome challenges associated with completing a real estate transaction. Not only are such transactions faster, but they also provide a much lower-cost option while simultaneously increasing transparency.
Whether the vast majority of real estate transactions may one day be conducted using blockchain technology remains to be seen, but blockchain technology is certainly already changing the real estate industry.